US abandons settlement freeze policy

WASHINGTON—The Obama administration abandoned its effort to convince Israel to renew a freeze on building settlements in the West Bank, temporarily derailing hopes for a fresh round of peace talks between Israel and the Palestinians.

"After consultations, a moratorium extension will not provide the best basis for resuming negotiations," a senior administration official said. He added that, in coming weeks, the U.S. would "engage with both sides on substantive, core issues."

Israel's 10-month restriction on building in West Bank settlements expired in September, and Palestinian negotiators made renewal of that moratorium a key condition for returning to peace talks. The Obama administration has offered Israel defense and diplomatic incentives but has been unable to induce Israel to halt construction.

That leaves the White House to try to find a new way to rejuvenate talks that have bogged down over the moratorium issue since late September, just weeks after the White House had announced it had jump-started stalled talks between the two sides. President Barack Obama has made efforts to secure a comprehensive Arab-Israel peace agreement a centerpiece of his foreign-policy agenda.

Secretary of State Hillary Clinton is expected to sketch out the next phase of peace talks at a speech in Washington on Friday.

The Israeli Embassy in Washington didn't immediately comment.

White House officials disputed claims by Israeli Deputy Prime Minister Ehud Barak that diplomatic efforts foundered because the administration was distracted by the fallout from the release of diplomatic cables by whistleblower site WikiLeaks.

State Department spokesman P.J. Crowley denied that the WikiLeaks release had affected U.S. efforts in the talks, and said Israeli officials had themselves been distracted by fires this week. He added that U.S. officials were meeting Tuesday with Palestinian Authority President Mahmoud Abbas.

The U.S.'s decision to stop pressing Israel to enact a 90-day moratorium wasn't a complete surprise. Palestinian officials last week said they believed the U.S. had given up on the issue.

Israeli Foreign Minister Avigdor Lieberman said Monday that he didn't "see any reason to extend this moratorium now," arguing that peace talks had remained "deadlocked" even when there was a moratorium on new settlements.

An Obama administration official said the basic conditions exist for a fresh round of talks, including the desire by Israel and the Palestinian Authority for a so-called two-state solution and for direct U.S. involvement in negotiations.

The setback in peace talks comes even as Palestinian diplomatic efforts are winning it fresh international support. On Monday, Argentina joined Brazil and Uruguay in recognizing Palestinian statehood. Mr. Crowley criticized the move and reiterated U.S. desire for "direct negotiations," not unilateral action.